TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: Arguments “for” and “against” LAURYNAS JONAVIČIUS is an As- Analytical publication sociate Expert at the Eastern Europe Studies Center and Political Science at Vilnius University. His research LAURYNAS JONAVIČIUS focuses on political developments and foreign policy of the Russian Federation and post-Soviet coun- tries. He holds a PhD in Internation- The purpose of this analysis is to assess the principles of al Relations from Vilnius University. operation of economic sanctions, the arguments “for” and He teaches the courses ‘Russian “against”, their effectiveness and the practical circum- Studies’, ‘Russian Politics and Econ- stances and consequences of their possible application in omy in a Post-Modern World’, and the context of discussions on the tightening of sanctions ‘Ukraine and Belarus Studies’. He against the Belarusian regime. worked as a foreign policy adviser to the President of the Republic of Lith- What does the current experience of sanctions and its aca- uania from 2009–2014 demic summary say about the conditions for the successful operation of sanctions and how many of these conditions exist in the case of Belarus? Could the tightening and devel- opment of sanctions (which are not the same thing) have a greater impact? Why are they necessary and why they might not work?

The analysis begins with a theoretical review the purpose of which is to explain the logic and principles of (economic) sanctions, the conditions and limits of effectiveness. This is done by reviewing the existing academic literature on the LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 2

application of sanctions. The second part of values that the sender is guided by and is pre- the analysis is devoted to the practical appli- pared to suffer because of doing so. At the cation of theoretical assumptions to the situ- same time, it is a message not only to the tar- ation in Belarus – the theoretical perspectives get of sanctions, but to all other similar states- of the scope and depth of the introduction of men (regimes). sanctions are assessed, the pros and cons of In the traditional sense, the logic of imposing the application of sanctions are identified. The economic sanctions on (authoritarian) regimes last part of the analysis focuses on recom- is based on the assumption that sanctions mendations and suggestions on which ways increase the costs of the regime’s behaviour, of putting pressure on the Belarusian regime so the application of sanctions should create could be most effective. incentives to change such behaviour. Faced This text is not a political statement, it is an with economic difficulties due to sanctions, attempt to summarize academic research and the regime has fewer resources to maintain its use the resulting “best practices” in the situa- legitimacy in the eyes of the public and faces tion in Belarus. double pressure, both externally and internally, where public dissatisfaction with the regime’s policies grows or there is a possibility for Different objectives the elite to split off (Kirshner 1997; Lektzian and Souva 2003; van Bergeijk and Biersteker, of sanctions 2015). This is the ideal model for the operation Academic research identifies several key func- of sanctions – the “naïve” theory of sanctions tions (objectives) that are pursued through (Galtung, 1967) – which rarely proves to be (economic) sanctions. As academics summa- true in practice. rize (Crawford and Klotz 1999; van Bergeijk and Biersteker, 2015), the typical objectives of Authoritarian regimes rarely take public opin- sanctions are to: ion into account, so the response to sanctions can be different: while sanctions reduce the 1. Force the target to change behaviour (e.g. regime’s revenue and increase costs, authori- stop human rights abuses, hold free elec- tarian authorities certainly do not always yield tions, stop supporting terrorists, etc.). to demands for behaviour change. A fairly 2. Limit the target’s ability to continue unwant- common response to sanctions is that instead ed behaviour by increasing business costs. of a change in behaviour, the regime simply 3. Finally, sanctions very often perform a sig- redistributes funds in order to ensure that the nalling (normative communication) func- needs of those in power are met, i.e. reducing tion, i.e. demonstrate what behaviour is un- public revenues but increasing revenues for supported and unacceptable. the pillars of support for the regime. The side effect of such a reaction is very often the in- creasing repression against opponents of the Since (economic) sanctions inevitably entail regime. In other words, naïve sanctions often costs not only for the target but also for the have the opposite effect than expected, lead- sender, the willingness to bear those costs is ing to broader use of broad economic sanc- already a strong message of the norms and tions against authoritarian states. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 3

Sanctions and type rents in the case of Belarus is related to Rus- sia, which is a factor that negatively affects of regime the impact of Western sanctions. The prospects for sanctions are also influ- enced by the type of (undemocratic) regime, whether it is a one-party, a military or a per- Effective and sonalist regime (Peksen, 2019). Academic re- search suggests that one-party and military efficient sanctions regimes are the most resilient to sanctions (di- The objectives of sanctions may be different rected against undemocratic regimes), while and their effectiveness should also be assessed the 1vulnerability of personalist regimes may separately from an analytical point of view. be higher due to underdeveloped institutional According to Pala (2021), when assessing the capacity to control society and high reliance “effectiveness” of sanctions, the latter should on external support or rents from natural re- be understood as the ability to achieve the set sources. While the Belarusian regime has the objectives, and not just as a cost-benefit ratio, characteristics of a personalist regime, it also i.e. process evaluation (efficiency). This dif- has characteristics that theoretically reduce ference is important because, at least for the its vulnerability to Western sanctions: time being, Western policy towards the Belaru- First, while it is indeed dependent on exter- sian regime has been dominated by a process nal support and, indirectly, on the rent of orientation (“it is important to do something natural resources, Belarus depends not on and agree on something”) rather than pursuit the West but on Russia (Dyner, 2018). of an objective. The search for a common low- est denominator in the imposition and negoti- Second, although personalistic, the ation of sanctions within the EU is essential- Lukashenko regime has complete control ly an attempt to ensure an effective process over the country’s security structures and that would not cost much politically (would has developed a trusted model for their con- not cause serious disagreements and would trol (Shraibman, 2020). generally not prevent unanimity within the EU) and allow for at least some solution. Howev- er, such a focus on the process has so far not contributed in any way to the achievement of Both of these factors make Western sanctions the defined objectives, i.e. was not effective in less effective on Belarus, the possibility to off- the literal sense. In the context of the impact set the cost of sanctions by economic support on Belarus’s processes, such a distinction from Russia still remains. The dissociation between process orientation and the actual of security structures from the regime is also implementation of the objective creates con- unlikely, as the regime has invested for many straints on EU policy and makes the policy par- years in increasing the capacity of the coer- tially efficient but not effective. cive apparatus and, at the same time, loyalty. A regime that is personalistic and increasingly It should be emphasized, however, that the dependent on the loyalty of security structures effectiveness of sanctions is in principle very tends to redistribute funds in favour of secu- difficult to measure and is often a subjective rity structures, with the greatest repression assessment by the sanctioner, which depends against the rest of society. In addition, the on the interplay of available intentions, capa- regime’s economic dependence on external bilities and interests. Sometimes even the very LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 4

fact of imposing sanctions can be considered 2. The greatest impact of sanctions is seen in a success, as the sanctioner’s ability to in- the first year of their application (until the crease the cost of disobedience of the target target has time to adjust). The pre-sanction- while not forcing it to change its behaviour is ing comparative advantage available at the also an influence and a form of expression of beginning of the sanctions (in the case of sanctioner’s power (Baldwin, 2000). Belarus – potassium fertilizers, petroleum products) has no effect in the long run and Sanctions do not and cannot be assessed ac- needs to be changed. As long as sanctions cording to a simplified black/white division. are thought about, they really do hurt. As Such a difference is not capable of measur- sanctions continue, the target has the op- ing not only partial success, but also to cov- portunity to adapt to changed conditions. er more diverse, “incomplete” dimensions of success. Finally, when understood as a po- 3. Psychological factor – the success of sanc- litical response to the crisis, sanctions are a tions depends on available expectations, safe “golden mean”. Given that the costs of reliability, strategic interaction. (1) Unex- military intervention are often excessive, and pected sanctions, i.e. those that cannot be that “hushing up” of the problem could have prepared for in advance or are not expect- negative consequences even for the domestic ed, are the most painful. (2) The effect of policies of democracies, economic sanctions sanctions (or threats thereof) is greater if remain the best option, despite the fact that the sanctioner has effectively applied sanc- those who apply them may “shoot themselves tions in the past. Threatening of implement- in the foot” (Giumelli et al. 2021). ing sanctions, but not applying them, only reduces credibility, i.e. the impact of sanc- tions. What is important here is that it is Theoretical conditions for necessary to talk about sanctions in areas where they are realistic and where coalition the successful operation agreement exists in response thereto. If of sanctions sanctions are threatened, the introduction The academic literature singles out general of which is not even guaranteed, they lose conditions that need to be considered when their effect. thinking about the impact and effectiveness of 4. The effectiveness of sanctions is inverse- future sanctions (van Bergeijk and Biersteker, ly proportional to the level of tolerance on 2015). According to research, there are several sanctions by the target, i.e. the higher the important factors that may determine the effec- risk the target tends to undertake, the low- tiveness of the use of (economic) sanctions. er the impact of sanctions are going to be on it. Sanctions for those who see a threat 1. The volume of pre-sanction trade must be to their survival are less likely to force a significant if sanctions are to be truly diffi- change in behaviour. cult to overcome. This means that (a) the lower the volume of pre-sanctioned trade, 5. Sanctions are more effective in democrat- the greater the likelihood that sanctions will ic regimes. The higher the level of author- be ineffective; (b) the imposition of sanc- itarianism, the lower the effectiveness of tions on high value products that are not sanctions. Targets that are authoritarian substitutable may have a greater impact. and face the dilemma of survival are, in prin- LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 5

ciple, not sensitive to sanctions (for them, What does this summary of the principles of economic loss is not as important as the (non-) functioning of sanctions tell us about survival of the regime itself). the possibilities of their wider and deeper ap- plication to Belarus? First of all, it should be 6. The multilateral nature of sanctions increas- emphasized that the deepening of sanctions in es their impact. The fewer alternatives (to this case would mean even stricter restrictions adjust trade) remain for the target, the harder on the entities already in the scope of sanc- it is to do so and the higher the cost. In ad- tions – individuals and companies. Meanwhile, dition, multilateral sanctions (such as those the broadening of sanctions is not their appli- imposed by the UN) have much greater legiti- cation to specific actors, but to the whole of macy. Sanctions imposed by an organisation Belarus. At present (i.e. until the EU announc- on its member are more effective than sanc- es new sanctions by 21 June), the list of sanc- tions imposed outside the organisation. tions is extremely modest: they apply to only 7. The effectiveness of sanctions is enhanced 88 individuals and 7 companies, and the im- by the specificity of the objectives they seek pact is neither extensive nor profound. There to achieve – the clearer the requirements of is really a lot of room for extending sanctions those applying sanctions, the more difficult by including significantly more people respon- it is for the target to manipulate with un- sible for violations of human rights. The list of certainties. The achievement of a specific companies whose activities allow the regime objective is also enhanced by the variety to generate revenue can also be much larger, of instruments used. One type of targeted starting with at least those that are sanctioned sanction is almost never effective. Effective- in the USA. In order to have a real impact, the ness requires a set of sanctions and other list really needs to be bigger – Belarusian ac- measures. The usual combination of sanc- tors have been compiling a register of such tions – an arms embargo, travel restrictions companies for some time.3 Lists of persons and asset freezes – is a minimum require- directly involved in the regime’s crimes are ment. Restrictions on trade (e.g. for target also being compiled.4 Of course, they need to groups) should theoretically increase the be scrutinized, but the basis for sanctions ap- impact of sanctions. An additional condi- plying sanctions not on 88, but on hundreds tion for the effectiveness of sanctions is the and thousands of supporters of the regime is use of accompanying instruments (threat certainly present. of force, international prosecution, covert operations, parallel application of sanctions by other players). Sanctions against Belarus – 8. Targeted sanctions can also be effective.2 arguments “for” and A general problem with sanctions is their side effect on non-sanction targets. The de- “against” teriorating situation of the regime-governed The European Union is currently imposing tar- society is one of the main deterrents to the geted sanctions on Belarus, which apply to 88 5 imposition of general sanctions. Increased individuals and 7 companies. Sanctions mean oppression and repression, a deterioration travel bans and freezing of accounts. By com- in the quality of the public goods received, a parison, by October 2015, the EU had imposed deteriorating situation of human rights and sanctions on 170 individuals and three Belaru- economic situation, and rising crime are sian companies. Previously imposed sanctions unplanned but inevitable effects of general also continue apply: an arms embargo; a ban sanctions. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 6

on the sale to Belarus of goods that could be ƒ JSC Synesis provides the Belarusian used for internal repression; travel insurance authorities with a tracking platform that and the freezing of accounts of four people6 can conduct searches based on videos, linked to the disappearances of journalists and perform analyses and use facial recog- opposition figures in 1999 and 2000. nition software, making the company responsible for repression of civil soci- ety and the democratic opposition by Belarusian companies/enterprises the Belarusian state apparatus. Syne- on the EU sanctions list sis employees are not allowed to com- ƒ Beltechexport is a private entity that municate in Belarusian, therefore the exports arms and military equipment company is responsible for violations manufactured by Belarusian state- of employees’ rights. The Belarus State owned companies to countries in Afri- Security Committee (KGB) and the Min- ca, South America, Asia and the Middle istry of the Interior have been identified East. Beltechexport is closely associat- as users of the system developed by ed with the Ministry of Defence of Be- Synesis. Therefore, the company bene- larus. Beltechexport benefits from and fits from and supports the Lukashenko supports the Lukashenko regime, while regime. Alexander Shatrov, Executive Di- also benefiting the presidential admin- rector of Synesis, has publicly criticized istration itself. protesters against the Lukashenko re- ƒ Dana Holdings/Dana Astra is one of the gime, saying the lack of democracy in leading real estate developers and build- Belarus is insignificant. ers in Belarus. The company was pro- ƒ AGAT Electromechanical Plant OJSC is vided with land for the construction of a member of the Belarusian State Au- several large residential complexes and thority for Military Industry (also known business centres. The owners of Dana as SAMI); it is responsible for the imple- Holdings/Dana Astra, brothers Bogol- mentation of the state’s military techni- jub and Ljubomir Karić, have close ties cal policy and reports to the Council of with Alexander Lukashenko. President’s Ministers and the President of Belarus. daughter-in-law Liliya Lukashenka holds AGAT electromechanical Plant OJSC high positions in the company. Dana itself benefits from and supports the Holdings/Dana Astra itself benefits from Lukashenko regime. The company man- and supports the Lukashenko regime. ufactures the Rubezh barrier system for ƒ GHU is the Central Economic Board of protest control, which was used against the Presidential Administration. GHU peaceful demonstrations following the 9 is the largest player in the non-residen- August 2020 presidential election, mak- tial real estate market in Belarus and ing the company responsible for repres- controls many companies. Alexander sion against civil society and the demo- Lukashenko has asked Chief of GHU cratic opposition. Viktor Sheiman to monitor the security ƒ 140 Repair Plant is part of the State Au- of the 2020 presidential election. The thority for Military Industry of Belarus; it GHU itself benefits from and supports is responsible for the implementation of the Lukashenko regime. the state’s military technical policy and LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 7

On 5 June 2021, a ban on Belarusian airliners reports to the Council of Ministers and flying through EU airspace and using -EU air the President of Belarus. The 140 Repair ports came into force. On 2 June, the EU Avia- Plant itself benefits from and supports tion Safety Agency (EASA) issued a directive8 the Lukashenko regime. The company banning European aircraft from flying through produces transport and armoured vehi- Belarusian airspace (except in case of emer- cles that were used during the peaceful gencies). demonstrations that took place after the 9 August 2020 presidential election, On 28 May 2021, the European Broadcasting making the company responsible for Union (EBU) decided to suspend the member- repression against civil society and the ship of the Belarusian broadcaster BTRC. democratic opposition. The possibility of extending sanctions to more ƒ OJSC MZKT (also known as VOLAT) individuals and legal entities on the sanctions is a member of the State Authority for lists and extending sanctions to individual Military Industry of the Republic of Be- sectors in Belarus is currently being consid- larus. it is responsible for the implemen- ered in Europe.9 The options under consider- tation of the state’s military technical ation include: policy and reports to the Council of Ministers and the President of Belarus. ƒ Sanctions for regime officials involved in -re OJSC MZKT itself benefits from and pression, disseminating regime propaganda supports the Lukashenko regime. OJSC and otherwise supporting the regime. MZKT employees who have protested ƒ Suspension of financial support to the Be- during Alexander Lukashenko’s visit to larusian regime (suspension of credit lines, the plant and went on strike after the investments, acquisition of Belarusian 2020 presidential election in Belarus bonds). have been fired, making the company ƒ Suspension of budget support in the frame- responsible for abuses of human rights. work of development cooperation projects (from the IMF and EU countries). ƒ Economic sanctions for the oil and petro- leum products, potassium fertilizers, steel Companies sanctioned by the and wood refining sectors. USA7 ƒ Suspension of cooperation with Belarusian ƒ Belarusian Oil Trade House state-owned banks. ƒ Belneftekhim ƒ Disconnection of Belarus from the SWIFT ƒ Belneftekhim USA, Inc. system. ƒ Belshina OAO ƒ Suspension of Belarus membership in inter- ƒ Grodno Azot OAO national sports organisations and exclusion ƒ Grodno Khimvolokno OAO from international competitions and the To- kyo Olympics. ƒ Lakokraska OAO ƒ Withdrawal of the right to broadcast the Eu- ƒ Naftan OAO ropean Football Championship from Bela- ƒ Polotsk Steklovolokno OAO rusian state television and (free of charge) transfer to Belsat TV. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 8

human rights. In response, sanctions need to What are the possibilities and prospects for be tightened and extended, in particular by applying these sanctions? increasing the costs of such behaviour. Al- though this time none of the foreign nationals were directly affected physically, the absence Pros: moral and value of a practical response would open the door to First, doing nothing in terms of reputation and a recurrence of similar or worse incidents. The normative and moral leadership would cost escalation of the migrant problem at the Lith- both Lithuania and Europe a great deal. Even uanian-Latvian border, apparently inspired by now, undemocratic world regimes (starting with the regime, is just one possible example. This Russia, China and others) do not see Europe also cannot be allowed. as capable of taking decisive action to defend their interests and values. Following the theo- Fourth, Belarus’s economic and military power ry, the introduction and application of general is far from equal to that of the European Un- sanctions should perform a signalling func- ion, which facilitates the imposition of sanc- tion. Because if there is no signal now (“terribly tions, because the argument often used in the strong regret” does not count), EU signals may debate on sanctions against Russia – the lat- not be responded to at all later. The absence ter’s reaction and counter-actions being both of a signal would mean acknowledging one’s directly painful in the EU and increasing secu- inability in announcing support for the develop- rity tensions in the region – is not applicable. ment of human rights and freedoms. The EU, While the possibility that Russia may react to as a normative power, must react decisively if increasing Western sanctions on Belarus can- it is to remain such a power at all. not be ignored11, Belarus’s own chances of tak- ing action that would hurt the West unbearably Secondly, the reason directly related to the are far less. first reason is the issue of EU creditworthi- ness. The harsh rhetoric of the West and the EU10 following the forced landing of the Rya- Punishing the regime economically nair plane cannot be left to words. Such united is real, but has side effects outrage and harmonization of rhetoric inspires Although Belarus ‘economic dependence on hope that the regime’s behaviour has “opened the EU is not substantial, with the EU account- its eyes” even to those who have so far doubt- ing for 18.1 percent of Belarus’ trade turnover ed the need to stem Lukashenko’s rage. In oth- while Russia amounts to 49.2 percent (Euro- er words, the current circumstances are proba- pean Commission, 202012), the imposition of bly the best time to achieve European unity in regards to tough action against the regime. If sector-specific sanctions could have a signifi- A has already been said, B must also be done. cant impact on the regime’s economy. Exports of oil and refined petroleum products account Third, the behaviour of the regime has large- for the largest share of the country’s exports ly become a threat not only to the population (about 20 percent, see Table 1) and are an im- inside the country but also outside it. The portant source of budget revenue in foreign landing of an international flight, posing a di- currency. The main buyers of Belarusian oil rect threat to the citizens of many parts of the products are the Netherlands, the United King- world, makes the further rampage of the re- dom, Poland and Ukraine. The Netherlands gime dangerous in a broader context than just and the UK are essentially transit entities, i.e. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 9

Belarusian products sent there continue to A similar direct effect is more difficult to achieve travel, mostly to Poland and Ukraine as it has for potassium fertilizers, the exports of which been stated. are about as important to the regime’s budget as petroleum products. The largest buyers of It is certainly possible for European countries Belarusian potassium fertilizers (according to to abandon Belarusian oil products, and al- 2020 data) were Brazil (about 20 percent), Chi- though their price could rise slightly, it would na (13 percent), India (12 percent), Indonesia (5 not be such a painful blow (the oil market in percent), Malaysia (4 percent), USA (4 percent). Europe is very competitive and Belarusian In total, potassium fertilizers were exported to products should soon be replaced). It would be the EU for about USD 180 million (about 8 per- much more painful on Ukraine if it agreed to cent). Potentially, the biggest impact the EU impose sanctions. In 2020, about 40 percent can have on Belarusian exports of potassium of imported oil products in Ukraine came from fertilizers is to restrict their transportation and Belarus (primarily gasoline and diesel).13 In transit through European ports. There is no addition, it would be more difficult for Ukraine spare capacity in Ust-Luga to do so15, and talk than for EU countries to quickly find a substi- of the planned construction of a new fertilizer tute for oil products, especially if increasing terminal remains at that stage so far. dependence on Russia is to be avoided. This means that the imposition of sanctions would It is stated that currently about 90 percent of cost Ukraine much more than the EU. It would all potassium fertilizers exported from Belarus also be painful for Belarus to lose about 10 are transshipped through Klaipėda.16 Thus, the percent of its budget revenue. Thus, the effect impact on Belarusian revenues from potassi- can certainly be exerted, at least at an early um fertilizer exports would be significant (due stage, until exports are reoriented or schemes to rising transportation costs and reputational are found to circumvent sanctions. losses). However, the cost of such sanctions would be directly felt by Klaipėda port, as it According to Belarusian statistics, the lar- would lose about 30 percent of its handling gest buyers of Belarusian oil products are volumes, which would need to be replaced the Netherlands and Great Britain. Howe- by other products. Potassium fertilizers are ver, neither the Dutch nor the UK statistics a rather niche product, i.e. it is not quickly re- reflect any such role for Belarus – Belarus placeable. An embargo on fertilizer (potassi- is not even in the top 50 of these countries’ um and nitrogen) exports to EU countries is largest import partners. This is due to the estimated to cost Belarus about USD 400 mil- fact that a representative office of the Be- lion a year.17 However, with regard to sanctions larusian oil company operates in the United for the (potassium) fertilizer sector, their effect Kingdom, which is the largest exporter of oil would be significantly increased if not only the products from Belarus (BNK (UK)), and the import but also the transit of fertilizers were Netherlands is a kind of ‘hub’ for oil products, authorized. On the other hand, it is Lithuania through which oil is resold and products are that would bear the costs of transit suspen- transported around the world. Very often, Be- sion, which leads to two conclusions: on one larusian gasoline and diesel can be found in hand, it would be politically easier to take such import statistics from countries to which, ac- a decision at the EU level if Lithuania agreed to cording to Belstat, Belarus does not supply bear the costs; on the other hand, Lithuania it- oil products at all.14. self may face excessive political and econom- LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 10

ic costs that would be unacceptable to the On one hand, by closing the transit of natural Government. Potentially, such a negative ef- gas through Belarus, Europe itself could push fect could be offset by an agreement at EU lev- itself into greater dependence on Russia, as it el based on the principle of “solidarity”, so that will still want gas and its supply would be the Lithuania’s losses would be at least partially quickest and efficient through Nord-Stream. compensated through EU support programs Russia (Gazprom) is already announcing plans or other means (e.g. compensation is provid- to significantly reduce gas transit through Be- ed for Lithuania under the special Kaliningrad larus by the end of the year, according to ex- Transit Scheme, under which the European Un- perts, with plans to launch Nord-Stream II by ion has undertaken to reimburse all addition- the end of the year.21 On the other hand, refus- al costs incurred by Lithuania in connection ing transit through Belarus would simplify the with the introduction of the Facilitated Tran- routes for gas supplies from Russia to Europe sit Document and the Facilitated Rail Transit and, potentially, make it easier to restrict Rus- Document, including payroll costs. According sian gas supplies to Europe if there is political to the budget of the EU financial perspective will in regards to this. 2021–2027, EUR 189 million in funding was In 2019, Lithuania imported 0.938 billion m³ of planned for Lithuania). natural gas from Russia. In 2020, this amount- Another option for sanctions is the suspension ed to 0.945 billion m³. Most of the gas reached of the transit of Russian gas to Europe through Lithuania through the territory of Belarus. the territory of Belarus, i.e. Europe’s refusal to With the potential interruption of gas transit buy the gas that reaches it through Belarus. It through Belarus, Lithuania would still be able is estimated that it would cost Belarus about to supply gas through the LNG terminal, but fi- USD 350 million a year.18 (Russian analysts nal gas prices may increase. Such costs (bear- point out that these are not taxes paid directly ing in mind the growing demand for gas and to the Belarusian budget, but instead are not prices in international markets this year) may very transparent “deductions” the payment be significant for Lithuanian gas consumers. of which is not very clear19). A ban on (Rus- The impact of sanctions on Belarusian servic- sian) gas imports via Belarus would most like- es, especially transportation (any surface tran- ly be supplied via the Nord-Stream I pipeline sit) through Belarus, is more difficult to quanti- and possibly via Ukraine (although there are fy. In 2020, Belarus exported USD 8.8 billion in still unanswered questions in this case). The services. 42 percent (USD 3.7 billion) of these Yamal-Europa pipeline, which passes through services involved transportation services. The Belarus, supplies the EU with 33-35 billion m³ European Union accounted for 31 percent of of natural gas every year.20 If the EU were to im- services exports (35 percent to Russia). The- pose sanctions, in theory (from a legal point of oretically, refusing such services would cost view) Gazprom, which uses the pipeline, could Belarus about USD 2.7 billion. Again, it is nec- simply suspend gas supplies and demand essary to keep in mind that such a boycott of compensation from the actors that imposed the export of services would be a considerable the sanctions. An important strategic point in cost for Europe, as goods travel from the EU this regard is that action is also needed on both to Russia, Asia and China via Belarus. These Nord-Stream pipelines if maximum impact are large flows that are not easy to route quick- is to be achieved by restricting gas supplies ly through other countries, and there is also a through the Yamal-Europe pipeline. Several lack of physical capacity (this would lead to assessments are possible in this situation. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 11

a lot of traffic jams at the borders).22 An im- borrowing either from Russia or from interna- portant aspect to keep in mind about these tional financial institutions (IMF, World Bank). “transit sanctions” is their potential impact Eurobonds have made it possible to at least on goods that are now imported into Belarus partially diversify the geographical structure from Europe, have Belarusian labels affixed to of public debt and (again, in part) reduce the them, and continue to travel to Russia, thus debt burden on Russia. Thanks to Eurobonds, circumventing retaliatory sanctions imposed the government was able to refinance part of by Russia on Western products. Belarus ben- the public debt, extend the repayment terms efits greatly from such sanctions, including by of external debts and at the same time ease actors to the regime.23 the payment burden. After 2020, Minsk’s abil- ity to continue to benefit from Western finan- The second most important international cial support will inevitably decline. European component of the Belarusian services sector creditors have already begun to look for ways is IT services, which in 2020 accounted for to get rid of Belarusian securities.31 Belarus is about 20 percent of total services exports unlikely to have similar borrowing instruments (USD 2.5 billion).24 In 2019, the share of Bela- in the West in the near future. Restricting fi- rus’ GDP generated by the IT sector reached nancial borrowing in the West will inevitably 6.5 percent.25 In 2017–2019, exports of IT ser- mean greater difficulties for the Belarusian vices from Belarus increased by 150 percent, regime in servicing its public debt32 and lim- and in 2019 accounted for more than half of iting its access to cheaper borrowing. While the country’s GDP growth.26 Restrictions in there will still be the possibility of borrowing in this sector would have a significant impact on Russia (by distributing the same bonds), it will the Belarusian economy, but the problem is no longer be as attractive as it will inevitably that most workers in the sector are often unfa- require higher interest rates. In addition, such vourable to the regime and wish for a change, an approach to sanctions will further increase therefore, restrictions in this sector could have Belarus’ financial dependence on Russia. a negative impact on the growth of Belarus’s middle class and civil society,27 forcing many The idea of disconnecting Belarus from the in- young people to simply emigrate. Statistics ternational interbank financial settlement sys- show that the salaries of employees in the tem SWIFT has been under discussion in the IT sector (according to 2019 data) were the West as a very radical measure for some time. highest among all sectors of the economy, i.e. Such a measure has been applied in the world workers in this sector mostly met the criteria only a couple of times so far, with regard to of the middle class.28 Iran and North Korea, and to banks operating in Crimea after the Russian occupation. There Another area of sanctions against Belarus is is general agreement that disconnection from the restriction of financial borrowing in the SWIFT is a very strict measure that would actu- West. Since 2010, Belarus has issued USD ally do a lot of damage to disconnected banks. 5 billion in Eurobonds in international financial They would no longer be able to settle with markets.29 In 2020 alone, Belarus managed foreign banks, i.e. pay for services, goods, per- to borrow USD 1.25 billion by distributing Eu- form other financial transactions. This would robonds.30 This method of borrowing was very inevitably disrupt the implementation of many favourable for the Belarusian government, as it projects, the fulfilment of obligations, settle- allowed to obtain money by avoiding the appli- ments. In principle, disconnection from SWIFT cation of conditionality, which is inevitable by would, for some time, paralyse the Belarusian LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 12

economy and participation in the world trading Factors to consider system. It would have a very painful effect on the economy of the country that is open and when planning economic dependent on trade. It should be noted that sanctions the disconnection from SWIFT applies to indi- There is a consensus in the academic and ex- vidual banks and not to the country as a whole, pert literature that sanctions have a limited so that only the financial institutions involved effect,34 especially when applied to non-demo- in with the regime the most could be discon- cratic regimes. However, the question of the ef- nected. However, even this would have a big fectiveness of sanctions is difficult to answer impact. Thus, in order to deal a really painful even when comparing many cases of empirical blow to the regime, disconnection from SWIFT sanctions, because sanctions applied in dif- is an effective means of greatly increasing the ferent periods, in different circumstances and cost of the regime. This measure will not nec- in different cultural and geographical areas essarily force the regime to change its behav- cannot be compared in principle (Pala, 2021). iour or retreat. The examples of North Korea A number of important limitations need to be and Iran confirm this. Studies also show that borne in mind when deciding on the scope and disconnection from SWIFT only has a signifi- depth of sanctions against Belarus: cant effect for a limited period of time – until sanctioned actors develop alternative pay- 1. Sanctions against Belarus would not be ment channels. In the case of Iran, the dis- comprehensive, i.e. the “emergency exit” connection of SWIFT had the greatest impact provided by Russia and other less demo- for a little over a year (Brewer, 2016), and then cratic states in the region and in the world settlements were resumed in almost no time. (such as China) would remain. The exist- Other experts agree with this possible course ence of an “emergency exit” severely dis- of events, who also state that over time, Be- torts the effects of sanctions imposed only larus is likely to switch to the settlement sys- by the West and largely allows it to be am- tem of the Central Bank of Russia, which was ortized (of course, the increase in costs for created after the West imposed sanctions on the regime does exist). This means that the Russia over the occupation of Crimea. Inter- introduction of secondary sanctions35 is a mediaries would most likely be introduced for prerequisite for efficiency gains. This will settlements (which worked effectively in the not guarantee that sanctions will not be case of Iran), and alternative systems such circumvented, but will increase the costs of as China’s CIPS or even the European INSTEX such circumvention and reduce the number would be considered.33 Domestic settlements of alternatives. The biggest problem in such in Belarusian rubles would continue to be the case is whether there will be a political will National Bank’s financial information trans- for Belarus to go into open conflict with oth- mission system used since 1999. Assess- er actors, in particular Russia. ing all the abovementioned circumstances, 2. Sanctions and restrictions on non-demo- one can think of the instrument of “striking” cratic regimes whose cost/benefit analysis disconnection from the SWIFT system – dis- is not based on the moral and value princi- connection of the most important banks for a ples customary in the West almost inevita- short time (e.g. half a year) so that they do not bly have undesirable negative effects on the have time and motivation to invest in alterna- country’s population. As Lukashenko has tive settlement routes. already shown his commitment to the use LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 13

of force against society, there is a very good gime to ease the cost of sanctions (Early chance that, in the case of (general) sanc- and Peksen, 2020). This does not work in tions, a large part of the cost will have to democratic regimes, as a growing shadow be borne by ordinary people. The economic economy further weakens the resilience of model of Belarus, developed by Lukashen- those in power. Belarus’s shadow economy ko, is based on its total control over the is already quite large – 68th out of 91 rat- entire economy of the country (Papko and ed countries in the world (IMF, 201537). In- Kozarzewski, 2020), which means that the formal transactions and agreements cover regime has a very high potential to pass on sufficiently large amounts and sectors. The costs to society. The counter-argument may direct involvement of the regime in informal be that dissatisfaction with the regime with- economic activities is also a means of re- in the country is high enough and the public ducing the cost and pressure of sanctions is determined to endure difficulties in the (Early and Peksen, 2020). Such activities are name of the potential for a possible even- recorded in North Korea, Iran. Involvement tual change in the regime. However, these in the shadow economy allows sanctioned are already hypothetical assumptions that regimes to manage and offset the cost of cannot be proven in any way. sanctions. At the same time, allowing the private sector to engage in the shadow econ- 3. The costs of sanctions will inevitably be omy reduces public dissatisfaction with the borne not only by the target (regime) but regime. In this context, a key milestone in also by the sanctioner, namely – the West- the application of sanctions against Belarus ern states. For example, it is estimated is the strong focus on preventing the growth that the cost of sanctions to the Lithuani- of smuggling and other illegal activities. an economy (assuming that all exports to Participation in illegal schemes of tobacco, Belarus would be banned) would amount to weapons and other goods brings considera- about 0.9 percent of GDP in three years, of ble income to the regime.38 which 0.5 percent would be considered as loss in 2021.36 Although this is not an un- 5. Authoritarian regimes have the privilege bearable burden, it must be taken into ac- (compared to democratic regimes) of al- count that sanctions would be most painful lowing themselves to focus on meeting the for several specific sectors (Klaipėda port, needs of a much smaller circle of support- Lithuanian railways, carriers). On the other ers (the winning coalition) than democrat- hand, these calculations do not include the ic leaders during the period of sanctions. effects of possible regime responses, which In some cases, the costs of sanctions can are difficult to predict and even more diffi- even boost the loyalty of supporters of the cult to quantify. regime, as their well-being becomes even more dependent on the “private goods” pro- 4. Studies show that economic sanctions, vided by the leader. Accordingly, the decline especially against undemocratic regimes, in budget revenues due to the shadow econ- lead to the growth of informal econom- omy is not an unbearable burden on undem- ic activity (increasing size of the shadow ocratic leaders. economy), which allows the sanctioned re- LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 14

Summary this would not force the regime to radically change its policies, but would create many in- The EU Council conclusions from October conveniences and problems. However, those 2020 identify a number of key objectives to be problems, as the theory suggests, would have pursued by the EU through sanctions and oth- the greatest impact in the short term, and their er measures having an effect against Belarus: marginal costs would decrease over time. This ƒ it is requested to immediately and uncon- situation presupposes the need to consider ditionally release all political prisoners and large-scale but short-term sanctions, as they illegally detained journalists; would have the greatest “striking effect”. Of course, communication on the extent and du- ƒ it is requested to immediately end the vio- ration of sanctions, which are best left undis- lence and repression; closed, would play a key role here, thus creat- ƒ it is requested to hold free and fair presiden- ing maximum uncertainty and preventing the tial elections. regime from adequately preparing for pressure.

According to the theory, economic sanctions This formulation of objectives, bearing in mind alone would have less of an effect than those the illegitimacy of Lukashenko’s presidency, that involve more of an effect on the regime implicitly implies an attempt to force the re- of measures. Studies mention threats (albe- gime to change its behaviour, the request to it indirect) on the use of force, prosecutions take very specific action and to signal (full) (which are already under way), steps to reduce non-compliance with the values and norms the reputation and self-esteem of the regime of the EU-Belarus regime. However, from the (separation from international sports, cultural, regime’s point of view, these objectives are artistic events), a well-thought-out information not clearly hierarchical, so even total pressure company (both in terms of the regime and in leaves the regime manipulative, such as the shaping the message to the Belarusian public) traditional policy of “hostage-taking” when, would all increase the impact of sanctions and at some point, political prisoners begin to be strengthen both the effectiveness and efficien- released and this is presented as a move to- cy of sanctions. wards an agreement and pressure to forget other objectives. In order to minimize the po- Although sanctions currently seem to be the tential for such manipulation, there must be best tool for action, their planning and imple- a very concrete consensus in the West that mentation must not forget the negative impact the pursuit of all objectives is equal and inde- not only on the regime, but also on the coun- pendent of progress on any issue. Even if the try’s society and sanctioners. Such effects are regime actually starts “trading in prisoners”, it inevitable and must be prepared accordingly. cannot in any way be seen as a condition for Finally, as it is currently not possible to ensure concessions on the suspension of repression maximum multilateralism in sanctions, their or the holding of new elections. application could increase the Belarusian re- Sanctions, if sufficiently severe, uniform and, gime’s dependence on other actors, in particu- above all, applied consistently, would have a lar Russia. The latter’s strategic objectives are significant negative impact on the economy to maintain maximum control over Belarus, and of Belarus and the regime that governs it. The individual Russian actors are interested in tak- cost of continuing the current policy to the re- ing control of Belarus’ most valuable economic gime would increase significantly. Most likely, assets. Russia’s growing pressure on Belarus since 2019 and Moscow’s attempt to prag- LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 15

matize asymmetric relations between the two sure may be another side effect of sanctions. countries mean that the possibility of Moscow This must also be borne in mind when consid- taking advantage of increasing Western pres- ering further action with regard to Belarus39.

TABLE 1: Belarusian exports (2019), main goods and partners40

Part in the export Billions of USD PART of goods TOTAL EXPORTS 31.8 100% Refined oil 5.240 16.48 United Kingdom 2.130 40.7 Ukraine 2.010 38.3 The Netherlands 0.444 8.47 Poland 0.233 4.45 Latvia 0.094 1.79

Potassium fertilizers 2.780 8.74 Brazil 0.561 20.2 China 0.353 12.7 India 0.347 12.5 Indonesia 0.174 6.25 USA 0.127 4.58

Cheese 0.996 3.13 Russia 0.949 95.2

Trucks 0.958 3.01 Russia 0.750 78.4 Ukraine 0.068 7.16 Uzbekistan 0.044 4.3

Crude oil 0.727 2.29 Germany 0.727 100 LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 16

Part in the export Billions of USD PART of goods TOTAL EXPORTS 31.8 100% Tractors 0.626 1.97 Russia 0.320 51.1 Kazakhstan 0.087 13.9 Ukraine 0.050 7.98

Cut wood 0.473 1.49 Lithuania 0.105 22.2 Latvia 0.078 16.5 Germany 0.066 14

Condensed milk 0.452 1.42 Russia 0.299 66 Kazakhstan 0.060 13.2 China 0.028 6.17

Furniture 0.441 1.39 Russia 0.216 49 Germany 0.050 11.3 Kazakhstan 0.028 6.33

Butter 0.377 1.19 Russia 0.349 92.5

Car parts 0.368 1.16 Russia 0.250 68 Ukraine 0.046 12.5 Switzerland 0.014 3.7 LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 17

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Endnotes 1 The personalist regime differs from the one-party and the military regimes in that the occupation of important positions is exclusively at the discretion of the individual leader. Such a leader may be the serviceman or have a party supporting him, but neither the military nor the party has an independent decision-making power independent of the leader (Geddes, 1999).

2 However, there are many empirical studies showing that apart from the objective of signalling, the objectives of behaviour change and cost-enhancement often remain unachieved even with targeted sanctions (De Vries 2002; Jones and Whitworth 2014; Secrieru 2015; Jarábik 2011; Bosse 2012; Giumelli and Ivan 2013 ; Bierste- ker and Portela 2015; Seeberg 2015; Hellquist 2016; Grebe 2010).

3 ‘Черный список компаний’, viewed on 15/06/2021, https://telegra.ph/CHERNYJ-SPISOK-BIZNESOV-10-22.

4 ‘Черная книга Беларуси’, viewed 15/06/2021, https://t.me/BlackBookBelarus

5 ‘Restrictive measures following the 2020 Belarus presidential elections’, European Council, viewed on 15/06/2021, https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-follo- wing-the-2020-belarus-presidential-elections/

6 Those persons are: Yuri Sivakov, former Minister of Sport and Tourism of Belarus; Viktor Sheiman, former Prosecutor General of Belarus, now Head of the Chief Economic Board of the Presidential Administration; Dmitri Pavlichenko – former officer of the Special Forces; Vladimir Naumov – former Minister of the Interior.

7 U.S. Department of the Treasury, Belarus Sanctions Regulations 31 CFR part 548, Washington D.C.: 2021. https:// home.treasury.gov/system/files/126/belarus_gl2h.pdf

8 European Union Aviation Safety Agency, ‘EASA issues Safety Directive calling on Member States to mandate avoidance of Belarus airspace’, viewed on 15/06/2021, https://www.easa.europa.eu/newsroom-and-events/ news/easa-issues-safety-directive-calling-member-states-mandate-avoidance

9 European Parliament, European Parliament resolution on the systematic repression in Belarus and its conse- quences for European security following the abductions from an EU civilian plane intercepted by Belarusian authori- ties (2021/2741 (RSP)), 2021. https://www.europarl.europa.eu/doceo/document/RC-9-2021-0328_LT.html

10 Reuters, ‘Belarus forces airliner to land and arrests opponent, sparking U.S. and European outrage’, viewed on 15/06/2021, https://www.reuters.com/world/europe/belarus-forces-vilnius-bound-ryanair-plane-land-de- tain-blogger-2021-05-23/

11 Such signals were already in place after the West closed the airspace to Belavia – Russia did not allow several German and French planes into its airspace.

12 European Commission, ‘Belarus’, viewed on 15/06/2021, https://ec.europa.eu/trade/policy/countries-and-re- gions/countries/belarus/

13 Maksim Malashkin, ‘Круговорот энергозависимости – Украина-Россия-Беларусь’, viewed on 15/06/2021, https://www.unian.net/economics/energetics/krugovorot-energozavisimosti-ukraina-rossiya-belarus-novos- ti-segodnya-11438299.html

14 Dmitrij Ivanovich, ‘Беларусь зарабатывает миллионы на серых схемах реэкспорта’, viewed on 15/06/2021, https://naviny.online/article/20180904/1536056403-belarus-zarabatyvaet-milliony-na-seryh-shemah-reeks- porta

15 On 19 February 2021, Russia and Belarus signed an intergovernmental agreement, which provides that in three years Belarus will be able to tranship 9.8 million tons of production (mainly oil products) through Rus- sian ports. In 2021 – 3.5 million tons, in 2022 – 3.2 million tons, in 2023 – 3.1 million tons. The total export of Belarusian oil products in 2020 amounted to 8.487 million tons (volumes were lower than usual due to oil supply problems from Russia), in 2019 – about 10.5 million tons. LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 20

16 Euroradio, ‘От $750 млн до $4 млрд в год: сколько Беларуси могут стоить европейские санкции’, viewed on 15/06/2021, https://euroradio.fm/ru/ot-750-mln-do-4-mlrd-v-god-skolko-belarusi-mogut-stoit-evropeys- kie-sankcii

17 Ibid

18 Ibid

19 Moskovskij Komsomolets, ‘Санкции против Белоруссии чреваты энергоколлапсом в Европе’, viewed on 15/06/2021, https://www.mk.ru/economics/2021/05/28/sankcii-protiv-belorussii-chrevaty-energokollap- som-v-evrope.html

20 Tatyana Manenok, ‘Что теряет Беларусь от снижения транзита российского газа?’, viewed on 15/06/2021, https://www.belrynok.by/2020/06/02/chto-teryaet-belarus-ot-snizheniya-tranzita-rossijskogo-gaza/

21 Natalya Korotkaya, ‘«Газпром» сокращает транзит газа через Беларусь. Сколько потеряет наш бюджет?’, viewed on 15/06/2021, https://naviny.online/article/20210612/1623482765-gazprom-sokrashchaet-tran- zit-gaza-cherez-belarus-skolko-poteryaet-nash

22 Euroradio, ‘От $750 млн до $4 млрд в год: сколько Беларуси могут стоить европейские санкции’.

23 Belsat, ‘Business and wealth of Viktar Sheiman. How Belarusian smuggling schemes work’, https://belsat. eu/en/news/26-03-2021-business-and-wealth-of-viktar-sheiman-how-belarusian-smuggling-schemes-work/; Eurasia Daily, ‘У Минска и Москвы очередная причина для недоверия. Теперь цветы’, https://eadaily. com/ru/news/2021/03/06/u-minska-i-moskvy-ocherednaya-prichina-dlya-nedoveriya-teper-cvety, ten pat, ‘«Сделано в Белоруссии»: на смену креветкам идёт инжир’, https://eadaily.com/ru/news/2017/04/05/ sdelano-v-belorussii-na-smenu-krevetkam-idyot-inzhir, viewed on 15/06/2021.

24 Belorusy I Rynok, ‘Экспорт ПВТ превысил $2,5 млрд’, viewed 15/06/2021, https://belmarket.by/ news/2021/02/05/news-44679.html

25 Anastasya Gurina, ‘Белорусский IT скатывается в кризис или пережидает?’, viewed on 15/06/2021, https://ej.by/news/economy/2021/04/06/belorusskiy-it-skatyvaetsya-v-krizis-ili-perezhidaet.html

26 The Bell, ‘The future of Belarus’ IT sector hangs in balance amid protests’, viewed on 15/06/2021, https:// thebell.io/en/the-future-of-belarus-it-sector-hangs-in-balance-amid-protests/

27 IntelliNews, ‘Lukashenko’s crackdown leads to exodus of IT professionals’, viewed on 15/06/2021, https:// www.intellinews.com/lukashenko-s-crackdown-leads-to-exodus-of-it-professionals-191224/

28 Naviny.by, ‘Золотой драйвер. Сколько потеряет экономика Беларуси из-за релокации ИТ-бизнеса?’, vie- wed on 15/06/2021, https://naviny.online/article/20201014/1602660004-zolotoy-drayver-skolko-poterya- et-ekonomika-belarusi-iz-za-relokacii-it

29 Belorusskij Partizan, ‘Последний гвоздь в крышку гроба? Евробонды поставили Беларусь на край пропасти’, viewed on 15/06/2021, https://belaruspartisan.by/economic/529752/

30 Ezhednevnik, ‘Беларусь заняла 1,25 миллиарда долларов через размещение евробондов’, viewed on 15/06/2021, https://ej.by/news/economy/2020/06/25/byudzhet-belarusi-poluchil-125-milliarda-dolla- rov-ot-razmescheniya.html

31 Deutsche Welle, ‘Гособлигации против Лукашенко: евробонды как средство борьбы с режимом’, vie- wed on 15/06/2021, https://www.dw.com/ru/naskolko-obligacii-belarusi-godjatsja-dlja-borby-s-rezhimom-lu- kashenko/a-56887998

32 Belarus’s external debt in March 2021 was USD 18.3 billion (Ministry of Finance of the Republic of Belarus, ‘Public Debt of the Republic of Belarus as of March 1, 2021’, viewed on 15/06/2021, http://www.minfin.gov. by/ru/public_debt/pressreleases/f5b134ee66694c08.html). LAURYNAS JONAVIČIUS | TIGHTENING AND DEVELOPMENT OF SANCTIONS AGAINST THE BELARUSIAN REGIME: ARGUMENTS “FOR” AND “AGAINST” 21

33 Leonid Fridkin, ‘Обрушит ли отключение SWIFT экономику Беларуси’, viewed 15/06/2021, https://officeli- fe.media/article/money/22011-obrushit-li-otklyuchenie-swift-ekonomiku-belarusi/ 34 Gabriel Felbermayr, Aleksandra Kirilakha, Constantinos Syropoulos, Erdal Yalcin, Yoto Yotov, ‘The Global Sanctions Data Base’, viewed on 15/06/2021, https://voxeu.org/article/global-sanctions-da- ta-base; United States Government Accountability Office, Agencies Assess Impacts on Targets, and Studies Suggest Several Factors Contribute to Sanctions’ Effectiveness, viewed on 15/06/2021, https://www.gao.gov/assets/gao-20-145.pdf 35 Measures directly imposed on Belarus and its entities shall be considered as initial sanctions. Secondary sanctions are imposed on persons and organisations that are not under the jurisdiction of the sanctioning actor (in this case, the EU) but are involved in transactions with sanctioned entities. An example could be sanctions against Russian individuals involved in agreements with sanctioned Belarusian actors.

36 Bank of Lithuania, Economic Relations of Belarus and Lithuania, viewed on 15/06/2021, https://www.lb.lt/uplo- ads/documents/files/Ziniasklaida/Kalbos_interviu_pristatymai/2021%2006%2002%20Lietuvos%20ir%20Bal- tarusijos%20ekonominiai%20ry%C5%A1iai.pdf

37 International Monetary Fund, Shadow Economies Around the World: What Did We Learn Over the Last 20 Years?, by Leandro Medina and Friedrich Schneider, viewed on 15/06/2021, https://www.imf.org/en/Publications/ WP/Issues/2018/01/25/Shadow-Economies-Around-the-World-What-Did-We-Learn-Over-the-Last-20-Ye- ars-45583

38 Organized Crime and Corruption Reporting Centre, Lukashenko Doles Out Prime Belarus Real Estate to Serbian Cronies, by Stas Ivashkevich, Olga Ratmirova, Ales Yarashevich and Bojana Jovanovic, viewed on 15/06/2021, https://www.occrp.org/en/investigations/lukashenko-doles-out-prime-belarus-real-estate-to-serbian-cro- nies; Organized Crime and Corruption Reporting Centre, Unseen and Unsanctioned, Belarussian Tycoons Slipped into the EU via Lithuanian Investments, by Šarūnas Černiauskas and Stas Ivashkevich, viewed on 15/06/2021, https://www.occrp.org/en/investigations/unseen-and-unsanctioned-belarusian-tycoons-slipped-in- to-the-eu-via-lithuanian-investments; Organized Crime and Corruption Reporting Centre, Tycoon with Close Ties to Belarus Dictator Used Time Travel to Evade Sanctions, by Šarūnas Černiauskas, Vlad Lavrov, and Stas Ivashkevich, viewed on 15/06/2021, https://www.occrp.org/en/investigations/tycoon-with-close-ties-to-be- larus-dictator-used-time-travel-to-evade-sanctions; Belsat, ‘«Полонезы» для Баку, «Кайманы» для Африки. Что производит и с кем торгует оборонка Беларуси’, viewed on 15/06/2021, https://belsat.eu/ru/ne- ws/23-03-2021-polonezy-dlya-baku-kajmany-dlya-afriki-chto-proizvodit-i-s-kem-torguet-oboronka-belarusi/

39 Russia’s desire and possibility to fully integrate Belarus into its composition (by completing the implementa- tion of the Russia-Belarus Union) is the subject of wide-ranging discussions. However, it is certainly agreed that Russia has been increasing the pressure on Lukashenko since 2014, because maintaining the latter regime in exchange for not always getting what is wanted costs Moscow a lot and is not politically and eco- nomically convenient (Leukavets, 2021).

40 Source: The Observatory of Economic Complexity, viewed on 10/06/2021 https://oec.world/en/profile/coun- try/blr